Young people are increasingly struggling to manage their finances, new figures show.
According to a study released by youth charity Rainer, more than three-quarters of the 18 to 24-year-old surveyed claim to have been in some form of debt, whether this be through loans, credit cards or another means of borrowing. Meanwhile, a third of young people questioned have been more than 5,000 pounds in the red while a fifth of respondents have owed over 10,000 pounds. And with a fifth of consumers in this age group having 50 pounds or less left at the end of the month to pay for food and other expenses after making payments on bills and debts, such as loans, young people appear to be struggling very to manage their money.
Joyce Moseley, chief executive for Rainer, said: "Young people tell us that being in debt is now just part of the norm, but it can soon become a millstone around their neck. evidence that debt can prevent young people from living independently or taking part in education or even eating healthily. "
Just under half (49 per cent) of young people are in debt via a student loan, while overdrafts and credit cards are also used "heavily" by 38 and 32 per cent of people respectively. Findings from the firm also disclosed that those consumers who are vulnerable in other areas of their lives are typically hit the hardest by money management difficulties, as 85 per cent of homeless young people are in debt.
As a result, the charity claimed that young people need more guidance on handling their money, with a cohesive approach towards fiscal management and debt also needed by financial services firms. Ms Moseley added: "Most young people say if they are in debt that they turn to parents or close family for help, but the young people we deal with can not do that."
For those struggling to cope as a rising number of debts taking up more of their disposable income, deciding to take out for a debt consolidation loan may well be a wise choice. In doing so, borrowers could be able to pay off money owed to various creditors quickly and so be left with more disposable income as they would only need to make one low-rate monthly repayment. Earlier this year, the idea of young people experiencing financial difficulties was reflected in a study commissioned by ClearDebt, which was carried out on Facebook, showing that 48 per cent of the 200 18 to 24-year-old surveys are currently in debt. The study also showed that 14 per cent of respondents think they will be in the red by 2012, with seven per cent stating they could be in arrears within the next ten years.
In addition, the research suggested that women could be the most likely to be paying back personal loans, credit cards and other types of borrowing as 50 per cent of the females questioned are previously in the red, with this falling to 45 per cent among men . And although 40 per cent of males surveyed claimed that they will never get into problems with debt, Andrew Smith, marketing director for the financial services firm, suggested that such consumers are being "rather over-optimistic".